Dear Parent,
At this age it is important to teach your teen about the hazards of credit cards. Just because it is on the credit card doesn’t mean they don’t have to pay for it and budget for it. Teach your teen that credit cards are strictly for emergencies. You may want to start your teen on a pre-paid credit card or debit card. Explain to your teen how easy it is to get into trouble by charging up his credit card and how fast the interest adds up.
It is also a good idea to expose your teen to investing. Helping kids invest, in a small number of shares of companies he is familiar with, is a great way to expose him to the stock market. And watching stocks rise and fall over the course of his teen years can reinforce the idea of long-term investing.
Make your teen responsible for buying his own personal items such as clothing and toiletries. If your teen owns his own car, he should have a job, and he should be buying his own gas and contributing to insurance and maintenance costs. This helps him learn to manage money and understand the costs associated with owning a car.
Your teen should also have his own checking account and be responsible for it. Teach him the basics about writing and recording checks, reviewing statements, and balancing his account. Your teen should also be saving money in an account for college. Consider offering matching funds to encourage saving.
